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  1. P-measure vs Q-measure

    Hi all, Imagine a scenario in which Company XYZ has promised the following awards of restricted stocks at the end of 2 years based on the ranking of 30-day average closing stock prices among 30 companies in similar industry: 1st - 5th 1000 shares 6th - 10th 500 shares 11th - 20th 100 shares...

  2. Accuracy of Monte-Carlo Simulation for Option Pricing

    Hi all! I have a question regarding the accuracy of Monte-Carlo simulations for option pricing. I have used the following VBA code to price a plain-vanilla European call option, and then compared the result to the output from the Black-Scholes formula. When I set the time to expiration to 3...
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